| CNN | - |
(CNN)
-- Mention Morocco and most would first think of the exotic markets of
Marrakech, the desert dotted with ancient kasbahs and, of course, the
classic 1942 wartime film "Casablanca.
Nine finance hubs of the future ... they're not where you think
September 5, 2014 -- Updated 1541 GMT (2341 HKT)
New York, London and Hong Kong may
be the leading finance hubs of today, but where are the emerging
financial centers of tomorrow? There are some surprising cities among
those tipped for success ...
HIDE CAPTION
Finance hubs of the future
STORY HIGHLIGHTS
- Experts tip cities including Casablanca and Busan as emerging financial hubs
- The current growth in Asia means there is massive opportunity there
- Europe struggles while South America and the Middle East bounce ahead
Future Finance showcases future trends related to the global financial system.
(CNN) -- Mention Morocco and most would first think
of the exotic markets of Marrakech, the desert dotted with ancient
kasbahs and, of course, the classic 1942 wartime film "Casablanca."
But Casablanca, the main
port city of Morocco, is among the places being tipped by experts as
emerging future global financial centers.
As the gateway between
Europe and Africa, Casablanca aims to take advantage of its geographical
position and also act as a hub for North, West and Central Africa, said
Hicham Zegrary, director of operations and institutional affairs at the
Casablanca Finance City Authority (CFCA).
The CFCA is working hard
to position Casablanca as an international financial center, he said, by
building its technology infrastructure and improving the legal
environment in which business is done. Zegrary added that due to
Morocco's many partners throughout Europe, North America and Asia, for
investors "it is easier to do business with African countries from
Morocco."
Since its inception four
years ago, the CFCA says it has attracted over 100 companies including
BNP Paribas, AIG, Clifford Chance, Silk Invest and Boston Consulting
Group to name a few.
It (Casablanca) will be as good as any
Mark Yeandle, Z/Yen Group
Mark Yeandle, Z/Yen Group
While Casablanca's ranking is still relatively low overall (62 out of 83) in a recent Global Financial Center Index report, it's significant that it debuted on the list and it signals a larger growth in the region.
What's more, GFCI asked
international financial services professionals which cities they
believed will likely become more significant in the next few years:
Casablanca was the name that came up most.
"They're putting a lot of
work into it there," said Mark Yeandle, associate director of Z/Yen
Group, the company who published the GFCI report earlier this year on
global financial centers. "They have a sensible budget and a good team,"
he added.
Casablanca is building
its infrastructure and rebranding itself as a hub for financial services
needed in Morocco, Tunis, and even further away in Lagos, Nigeria. "It
(Casablanca) will be as good as any," said Yeandle.
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Another newcomer and
fairly unknown city is Busan, South Korea, which has traditionally
operated in Seoul's shadow. It ranks 27th on the GFCI report, just
behind number 26 Qatar. But it ranks second only to Casablanca as a
place tipped by finance professionals as likely become more significant.
Busan has the fifth
busiest port in the world, not to mention the largest department store
in the world, despite the fact that many people have never even heard of
it.
"Busan are putting a
great deal of money and promotional activity behind their growth as a
financial center," said Yeandle. "They are building a dedicated area for
the center and are publicizing their focus on maritime finance and
derivatives trading."
For different reasons,
another Asian future contender is Kuala Lumpur, Malaysia. While
operating relatively quietly in comparison to its southern neighbor
Singapore, what sets Kuala Lumpur apart from others, says Saif Malik,
managing director and head of corporate and institutional clients for
Standard Chartered Bank Malaysia, is that it's quickly becoming a
leading financial center for Islamic banking, which operates with a
different set of rules to traditional banking.
"There is clearly a
plan," said Malik. "It's not an overnight journey, but the Malaysians
have realized to compete with Singapore and other long-established
financial centers, they have the niche in Islamic banking."
Islamic finance has seen recent growth two to three times faster than conventional banks, according to Ernst and Young in its World Islamic Banking Competitiveness Report.
The global financial crisis and strong economic growth in countries
with a large Muslim population are both reasons for such progress.
Unlike neighboring
Jakarta, Indonesia, Kuala Lumpur stands out as having a more stable
political and economic environment. Malik says the Malaysian government
has made great efforts to attract a skilled workforce while at the same
time working in a trusted legal environment originating from the British
legal system.
The Malaysians have the niche in Islamic banking
Saif Malik, Standard Chartered Bank Malaysia
Saif Malik, Standard Chartered Bank Malaysia
In the 10 years to 2015,
it is projected that the Malaysian banking industry will have an annual
growth rate of approximately 9%, said Malik, and the government has
stepped up with various initiatives to promote foreign direct
investments into the country, including the InvestKL program which aims
to attract talent and build Kuala Lumpur into a global city.
While the Middle East
continues to grow, particularly Qatar and Dubai, so do cities in China,
especially if mainland China's ongoing currency issues around the Renminbi
become open and transparent, said Yeandle. "The wealth there has to go
somewhere. It's almost inevitable," he said, mentioning Shenzhen,
Dalian, Shanghai and Beijing, as current and future financial hubs.
In Latin America,
massive growth is happening too, according to the GFCI report. Buenos
Aires, Argentina, takes the clear lead, jumping 21 places to become 25th
on the list despite the economic and political uncertainty in the country. Yeandle says that though Buenos Aires is unpredictable, "the long-term trend will probably be upward."
While the same can't be
said for many continental European cities. Rome, for example, saw the
biggest drop on the GFCI list, falling 19 places to number 54.
Paris, Milan, Madrid and Athens, have all seen enormous dips in their rankings since the decline of the Eurozone.
Luxembourg, however, is
holding strong and tipped to grow due to more lenient tax schemes
attractive to companies, said Yeandle, and Zurich continues its reign as
a financial hub thanks to its independence from the Eurozone.
But one point overall,
says Yeandle, despite any newcomers on the rise, there are certain
ingredients which make cities successful in the rankings and will
continue to do so. "If you look at the (current) top four (New York,
London, Hong Kong and Singapore), they are all very cosmopolitan,
welcoming to foreigners, they attract talented expats and they are
successful cities and attractive cities," he said.
Perhaps a note for all
cities hoping to climb in the ranks of future financial hubs: "You have
to be a successful city in order to be a successful financial center,"
said Yeandle.
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